Pakistan country brief

Political overview

National government

In May 2013, Pakistan successfully held general elections, marking the first transfer from one democratically elected government to another in Pakistan’s history. The Pakistan Muslim League-Nawaz (PML-N) won an outright majority of 185 seats in the 342 seat National Assembly. Mr Muhammad Nawaz Sharif was elected Prime Minister in the May 2013 elections. Mr Shahid Abbasi became Prime Minister on 1 August 2017, following Mr Sharif’s resignation in July 2017. The next scheduled general elections are due to take place in 2018.

In September 2013, PML-N candidate Mr Mamnoon Hussein was inaugurated as President for a five year term, replacing Mr Asif Ali Zardari. The Prime Minister heads the Cabinet and the President chairs the National Security Council, which comprises military chiefs and cabinet members.

Main political organisations

The present government is led by the PML-N, which holds a majority of seats (188) in Pakistan’s National Assembly.

National legislature

Pakistan has a federal system of government with a bicameral legislature: the National Assembly and the Senate.

The National Assembly (the lower house) has 342 seats. The majority of lower house seats are elected on a first-past-the-post basis, with 60 seats reserved for women and 10 for non-Muslim minorities. The reserved seats are allocated on the basis of proportional representation to parties that win more than 5 per cent of the directly elected seats.

The current Senate (the upper house) consists of 104 senators. In the Senate, 23 senators are elected by each of the four provincial assemblies, eight are FATA representatives and four are Federal Capital Territory (Islamabad) representatives from the lower house. Under the 18th Constitutional Amendment (passed in February 2010) four seats are allocated to non-Muslim minorities. An election for one half of the seats in the Senate was held in March 2015. The next Senate elections are due to be held in 2018.

All four provinces have their own elected provincial assemblies and governments. A Chief Minister heads each provincial government. Each province has a Governor, who is appointed by the President of Pakistan. Elections for provincial assemblies were held in May 2013 at the time of the National Assembly election.

Islamabad is a special 'Federal Capital Territory'. In addition, the Federal Government administers seven tribal agencies (Bajaur, Khyber, Mohmand, Kurram, Orakzai, South and North Waziristan) and six frontier regions. Collectively these 13 administrative units are known as the Federally Administered Tribal Areas (FATA).

Pakistan also administers approximately one-third of the area of the former princely states of Jammu and Kashmir and Gilgit-Baltistan — also known as the 'Northern Areas' of Pakistan — which have a quasi-provincial status and are not represented in the national parliament (legislature). They have their own elected parliaments and governments.

Economic overview

Pakistan's economy

Pakistan's economy is made up of the services sector (56.0%), industry/manufacturing (19.0%) and agriculture (25.0%). Agriculture is a mainstay of the economy, accounting for up to 25.0% of total Gross Domestic Product (GDP), with just under half of the country's population depending directly or indirectly on agriculture for their livelihood. Manufacturing is concentrated around the Karachi-Hyderabad region and Lahore. Industrial production is being severely impacted by chronic energy shortages; Pakistan relies on fossil fuels for more than 60.0% of its electricity, which is increasingly difficult to finance and a key contributor to Pakistan's growing deficits. As of 2015, Pakistan produced 67.7% of its electricity from fossil fuels, 28.6% from hydroelectric plants, 3.2% from nuclear fuels and 0.4% from renewable sources.

During the period 2004-2009, Pakistan experienced strong economic expansion due to growth in the manufacturing and services sectors, with GDP growth approximately seven per cent in 2004 and 2005. The onset of the global financial crisis caused Pakistan's GDP growth to fall sharply and in late 2008 Pakistani authorities embarked on a stabilisation program, supported by an International Monetary Fund (IMF) US$7.6 billion loan under a 23 month Stand-By Arrangement. In August 2009, the IMF extended the program to 25 months and raised its support to US$11.3 billion to help address increased risks and financing needs. In July 2013 Pakistan and the IMF reached staff-level agreement on a further three year, US$6.6 billion Extended Fund Facility. The IMF program concluded in September 2016, having helped restore macroeconomic stability and lifted growth.

There is renewed optimism on the direction of the Pakistan economy. Pakistan’s GDP growth rate has steadily risen over the past several years, with the 2017 growth at 5.0%, up from 3.6% in 2011.

Trade

In 2016, Pakistan’s exports totaled US$20.96 billion, while it imported US$38.25 billion worth of goods. Pakistan’s major exports in 2016 in terms of commodities were textiles, leather and sporting goods, rice and chemicals. Pakistan’s major imports were petroleum and related products, plastics, machinery and transport equipment, building materials, paper and tea. In 2015, Pakistan’s principal import sources were China (25.0%), the United Arab Emirates (13.0%) and Saudi Arabia (6.8%), while its principal export destinations were the United States (16.6%), China (8.8%) and Afghanistan (7.8%).

Bilateral relationship

Australia and Pakistan enjoy a long-standing strong and growing relationship underpinned by deepening people-to-people links. Australia established diplomatic relations with Pakistan after its 1947 partition from India and has had a resident mission in the country since 1948. Australia is committed to supporting Pakistan as a partner in its efforts to address security threats, build economic prosperity and enhance development.

Political relations

The Australian Government has intensified its engagement with Pakistan since 2008 in the areas of security cooperation (including defence and law enforcement training), economic reform, development and democratic governance.

There continues to be a range of high-level engagement activities between Australia and Pakistan. The Foreign Minister, the Hon Julie Bishop MP, travelled to Islamabad and Lahore in May 2015. Prior to this, the Pakistani Chief of Army Staff General Raheel Sharif visited Australia. There is also an active program of official level dialogue and engagement. In May 2017, Australia hosted the most recent round of the ongoing 1.5 track strategic dialogue. Officials also continue to meet under the Pakistan-Australia Joint Working Group on Border Management and Transnational Crime.

People-to-people links

Australia and Pakistan enjoy a common heritage and shared interests. Both countries are members of the Commonwealth and are federations with bicameral legislatures. Our people share a passion for sports and the arts, and our strong people to people links centre on an active and successful Pakistani community in Australia.

The Pakistani community in Australia is significant. As of August 2017, there were 64,345 Pakistan-born people living in Australia. Australian educational institutions received 12,437 enrolments by Pakistani students in 2016. In addition, in 2016 there were 23 Pakistani students studying in Australia on long-term scholarships under the Australia Awards program. These awards promote knowledge, education links and enduring ties between Australia and Pakistan.

Links between our tertiary sectors institutions are gaining ground under the New Colombo Plan, which has offered Australian undergraduate students the opportunity to undertake study and work placements in Pakistan since 2015.

Development cooperation

Economic and trade relations

Australia-Pakistan total two-way trade in 2016 was $1.7 billion. In terms of merchandise trade, Australian exports to Pakistan consist primarily of food products, cotton and fertilizers. Australia's major imports from Pakistan are textiles, petroleum and rice. Australia and Pakistan’s two-way services trade is worth $699 million.

An Australia-Pakistan bilateral trade agreement has been in force since 12 July 1990. The agreement commits both parties to "facilitate, strengthen and diversify" trade. The Australia and Pakistan Joint Trade Committee, which met most recently in Islamabad in May 2016, is the primary forum for discussion of bilateral trade and investment cooperation issues. Australia and Pakistan continue to work together under a Memorandum of Understanding on Strengthening Bilateral Trade and Economic Co-operation that was established out of the Australia and Pakistan Joint Trade Committee.

Austrade has three locally engaged Business Development Managers in Pakistan, one in each of Islamabad, Lahore and Karachi. Country management for Pakistan is the responsibility of Austrade's Regional Senior Trade and Investment Commissioner, who is based in New Delhi.

Australia and Pakistan are actively exploring avenues to expand trade and investment, particularly through agribusiness and agricultural science linkages. There are prospects for growth in trade and investment, particularly in:

Security cooperation

Cooperation to combat transnational crime, such as terrorism financing and illegal migration, has been strengthened through the Pakistan Australia Joint Working Group on Border Management and Transnational Crime. The Australian Federal Police has a 25 year relationship with Pakistan law enforcement. Working together, Australian and Pakistan agencies have disrupted a significant amount of transnational crime, for example, through drug seizures. Through the provision of training programs and the supply of specialist training equipment, Australia is assisting Pakistan to build capacity to counter serious and sophisticated crime.

In 1907, the Australian Defence Force sent its first student to Quetta Command and Staff College, and has regularly filled a place there since. The Australia-Pakistan defence relationship has grown significantly in recent years. In addition to the position at Quetta, the Australian Defence Force now sends a student to the National Defence University in Islamabad each year, conducts an annual counter-insurgency exchange between the Australian Command and Staff College and Quetta Command and Staff College, and Defence personnel periodically attend specialised courses in Pakistan. Australia continues to provide places for members of the Pakistan Armed Forces to attend a range of training courses in Australia. Defence has also established a post-graduate scholarship program for Pakistan in areas such as intelligence and counter-terrorism, logistics, maritime security policy and aerospace engineering.

Many of the Pakistan military's senior officers have visited Australia for talks, and some for training earlier in their careers. Australia and Pakistan hold regular Chief-to-Chief dialogues. Since 2010, the 1.5 track dialogue has been held regularly, bringing together senior leaders from respective militaries, government agencies and think tanks to discuss issues of mutual interest.

Human rights

The Australian Government remains concerned about the human rights situation in Pakistan, including the use of capital punishment and the treatment of minorities. Australia has raised its universal opposition to the death penalty and urged the Pakistan Government to address human rights concerns.

Australia's Special Envoy for Afghanistan and Pakistan

In 2017, Ms Penny Williams was appointed as Australia's Special Representative for Afghanistan and Pakistan, demonstrating the Government's commitment to coordinated and effective regional and international diplomacy.